Setback in Ireland’s recovery

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Ireland has been hoping to be the first periphery nation to emerge from official borrowing programmes in 2013

Sam FlemingEconomics Editor

Last updated at 12:01AM, December 17 2011

Ireland’s economic recovery hit a wall in the third quarter, raising questions about the country’s ability to weather brutal public sector austerity measures.

Ireland saw a 1.9 per cent slump in gross domestic product in the July-to-September period. It was the worst performance for two years and a far deeper contraction than analysts had predicted. The slump made Ireland the euro area’s weakest economy in the third quarter after Greece and sparked warnings by unions that Dublin’s austerity programme was driving the economy into the ground.

They came as Italy’s technocratic government comfortably won a parliamentary vote of confidence for